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Bribery Act 2010

The Government is reviewing the Bribery Act after business leaders claimed it was making it difficult for British firms to export goods.

The Business Secretary, Sajid Javid, is inviting companies to comment on whether the tough anti-corruption measures are “a problem”.

Critics fear it is a way of weakening the law at a time when the Government should be clamping down on existing loopholes, and supporters of the Act say they are surprised by the move.

Letters sent by the Department for Business, Innovation and Skills (BIS) invite industry leaders to comment on whether the Act has had an impact on their attempts to export. They also ask if guidance issued to help business people avoid problems under the Act is useful and for suggestions to clarify the information. BIS officials said the guidance that accompanies the Act, rather than the law itself, was the main focus.

Following widespread international criticism of the UK’s failure to reform its ineffective anti-bribery laws, the Act was regarded as one of the most controversial laws passed by the last government.

The Coalition boasted it was the world’s “toughest” anti-corruption law. But the Confederation of British Industry led fierce criticism of the Bill and argued it would restrict economic growth.

Opponents continued to lobby against aspects of it after it passed into law in 2011. They claim UK law goes “above and beyond international standards” and puts British business at a disadvantage against their competitors.

But the anti-corruption campaigner Transparency International said that corporate lobbying appeared to be the basis for the review rather than evidence. It said that 89 per cent of companies surveyed in the Government’s own research, released earlier this month, reported that the Act had no impact on their ability to export. The activists point out that no one has yet been prosecuted for facilitation payments in the UK and that there is a low risk of prosecution.

But Neil Carberry, CBI director for employment and skills, welcomed the review.

“Bribery is morally and legally wrong and businesses have been supportive of the principles of the Act. With the majority of other countries’ rules more flexible than the UK’s, some businesses are being put at a competitive disadvantage when operating in global markets,” he said.

“That’s why we are pleased that the Government has decided to review the impact of the Act, which we’ve long been calling for. It should focus on how to tackle corruption while protecting the UK’s competitiveness.”

Three men were jailed for masterminding a 23 million pound biofuel investment scam on Monday, in the first convictions by Britain’s Serious Fraud Office (SFO) under tough new anti-bribery laws.

The Britons were executives or agents of Sustainable AgroEnergy Plc, a company that promoted biofuel investment products linked to southeast Asian plantations of jatropha trees, once considered a wonder plant in the hunt for oil.

“These three individuals preyed on investors, many of whom were duped into investing life savings and pension funds,” SFO director David Green said.

A sign is displayed in an unmarked Serious Fraud Office vehicle parked outside a building, in Mayfair, central London – REUTERS/Andrew Winning

The convictions are a welcome break for the SFO, which has been trying to restore confidence in its ability to bring criminals and companies to book after a series of failures in high-profile cases. An inspection report last month found the agency had made mixed progress in tackling its shortcomings.

The SFO had been expected to be the leading prosecutor to use the Bribery Act, which came into force in 2011 to overhaul 122-year-old laws that were criticised for not giving prosecutors the tools to fight modern international crime.

Previous charges under the Act, however, had been brought by its sister prosecutor the Crown Prosecution Service (CPS).

A jury at London’s Southwark Crown Court found Gary West, 52, James Whale, 38, and Stuart Stone, 28, guilty of defrauding British investors between April 2011 and Feb. 2012, the SFO said. They were jailed for 13, 9, and 6 years respectively.

All three were charged with fraud-related offences and West and Stone with bribery or receiving bribes in breach of the Bribery Act. A fourth man was acquitted of all charges against him.

“The SFO has taken an important step forward in demonstrating its ability to police the Bribery Act,” said Omar Qureshi, head of anti-corruption at law firm CMS.

The Act has been called one of the world’s toughest anti-corruption laws. Bribery offences committed by individuals now carry a penalty of up to 10 years’ imprisonment, an unlimited fine and confiscation of assets.

However, the SFO remains under pressure to bring a case under the much-debated section 7 of the Act, which introduced an offence of “failure to prevent bribery”, whereby a company can be prosecuted for failing to have “adequate procedures” to prevent active bribery by “associated persons”.

Companies are also keen to see whether a corporate prosecution under this part of the Act will shed light on their liability for the conduct of such associated persons – and what the scope of the “adequate procedures” is.

Now, with effect from 1st July 2011 any company trading in the U.K. can be prosecuted if, in furtherance of the company business, one or more of its employees or representative’s are found guilty of bribing someone to do or not to do something contrary to their role.

The company will be able to claim a defence to such a charge if and only if it can prove it has put adequate compliance measures in place to prevent that occurrence.

Much will turn on the word “adequate” but the following is a quote from the legislative guidance,

“Accordingly, the detail of how organisations might apply these principles, taken as a whole, will vary, but the outcome should always be robust and effective anti-bribery procedures”.

The UK government has clearly indicated that it expects the anti-bribery training to be proportionate to the risks faced by the company. A very small business may rely heavily on simply telling staff, verbally, about their bribery policy.

However, for larger companies the Guidance Notes recommend extensive written communication, and training that is continuous and regularly monitored. The ideal means of delivering such communication and training is e-learning – and this is recognised in the Guidance Notes.